Companies that offer consumer credit such as payday lenders, debt management firms and brokers must do more to make sure their advertising does not mislead customers, the City regulator said.

The Financial Conduct Authority (FCA) said that since April, when it took over supervision of the consumer credit market, it has reviewed over 1,500 financial promotions for consumer credit products and it has opened 227 cases into promotions that were "non-compliant".

A quarter of cases opened related to advertisements for high-cost short-term credit, with many not prominently displaying a risk warning or representative APR (annual percentage rate), the FCA said.

Some 80% of consumer credit cases to date related to digital media such as websites, emails and texts.

Rules state that all promotions must be clear, fair and not misleading for consumers.

Examples of financial promotions which did not meet the regulations included internet search terms that took consumers to unrelated sponsored links. For example, a search for "government debt help" returned a sponsored link for a loan, potentially misleading people to believe the firm was offering government assistance.

The FCA has also uncovered advertisements for fee-paying debt management firms that did not make it clear that services are not free of charge and promotions that guaranteed firms would provide credit regardless of customers' circumstances.

Clive Adamson, director of supervision at the FCA, said: "It is important that all firms ensure financial promotions are fair, clear and not misleading so that customers are able to make informed decisions.

"We are disappointed to see standards fall short of what we expect, particularly in the consumer credit space, four months from when we took over regulation.

"We believe that firms in this sector can do more to ensure financial promotions meet the standards we would expect and will continue to monitor performance in this area."

The regulator said firms have responded positively when it has contacted them and have been quick to make changes to promotions that do not meet standards.

It said it will continue to monitor financial promotions and take action to drive up standards.